China Revises Taxes on Imported Goods Purchased Online

Effective April 8, Chinese consumers will pay a 17 percent cross-border e-commerce comprehensive tax comprising a consumption tax and a value-added tax on imported goods purchased online. The CECT will represent a 30 percent discount from the normal tax rate for general trade items.

The CECT will be assessed on the real transaction value (retail price plus freight and insurance) where such value does not exceed RMB 2,000 per transaction, and total annual transactions may not exceed RMB 20,000 per person per year. Articles and commodities on a positive list of tradable commodities via cross-border e-commerce, which should be published shortly, will be eligible for the CECT. Subject imports that exceed these values will be taxed more heavily as general trade items.

The CECT will replace the postal articles tax on imports purchased online, which combined an imported goods tariff, import VAT and consumption tax. That tax, which is primarily assessed at a rate of 10 percent but can range as high as 50 percent, is assessed on goods valued at less than RMB 1,000. The new policy will also eliminate the duty exemption for goods with a payable tax of less than RMB 50.

Also under the new rules, the postal articles tax will be assessed at three rates – 15 percent, 30 percent and 60 percent – depending on the category of goods to be imported.